Traditional luxury had a big year in China in 2020, driven by a strong domestic consumption trend Due to the Covid-19 pandemic, Chinese tourist shoppers who previously traveled the world made more of their high-end purchases closer to home. As Bain & Company found Last month, the luxury goods market in mainland China is likely to have grown 48% over the past year, reaching a whopping 346 billion RMB ($ 53.4 billion), largely driven by this turnaround in high-end shopping. The company also expects this trend to continue through 2021 and China to stay on track to become the world’s largest luxury market through 2025.
This shift has turned the strategy of many luxury brands on its head over the past decade of looking at their stores in mainland China as glorified exhibition spacesand optimizing stores in tourist hotspots like Tokyo, New York, and Paris to sell to Chinese travelers. Those days seem to be over and now it is critical for global brands to see their Chinese branches not just as marketing tools but as key points of sale.
Last year we saw this manifest through Burberry’s partnership with Tencent in a “social retail” store, when starting a massive flagship from Arc’teryx Shanghaiand via Nike’s Guangzhou store, which is integrated online and offline. However, there are signs that the domestic, inward shift in luxury consumption in China is going well beyond fashion, triggering a huge wellness and fitness trend that could dwarf the West in terms of market size.
Recently, CCI profiled the Youku show “Sleep Tight”. This highlighted the sleep deprivation epidemic that China’s city dwellers were facing and gave Youku parents Alibaba ample opportunity to sell sleep-related products. In addition to sleep products, services, and programs, fitness is another area where we’ve seen a flurry of investment in China. When the Covid-19 pandemic hit China in early 2020, home fitness became a hot topic among the most accomplished users of content commerce marketing in China Lululemon, Nike, and others offer streamed workouts for those stuck at home under strict lockdown regulations.
And while much of China has managed to return to a sense of normalcy after the coronavirus, fitness at home seems to be staying here and developing rapidly. China already has its own “peloton killer” in the form of the Xiaomi Yesoul V1-Plus Beast Smart exercise bikeand start myShape has developed an intelligent mirror almost identical to that Lululemon mirror. Now, Chinese companies that develop both software and hardware are attracting millions of investments and helping clear executives rise in the lucrative fitness and wellness industries.
Chinese fitness brand this week To keep completed a $ 360 million Series F financing round, led by Softbank’s Vision Fund, which received additional funding from existing investors such as Tencent. The six-year-old company estimates this at around $ 2 billion and will help diversify its already broad offering, which currently includes everything from an app with fitness tracking and live stream workouts to smart bikes, snacks and clothing.
In contrast to the luxury industry, the often ends up in the crosshairs The Chinese central government is actively promoting the wellness and fitness markets in China from Beijing as part of an ongoing “national fitness” campaign. With this in mind, we can only expect this boom in investment and marketing budgets to continue well beyond 2021.